I. Introduction

1. Claimant Eli Lilly and Company (“Lilly”), on its own behalf and on behalf of its enterprise Eli Lilly Canada Inc. (“Lilly Canada”) submits the following observations regarding outstanding procedural and confidentiality issues in advance of the first meeting of the Parties.

2. As set forth in its Notice of Arbitration, Lilly is a U.S. pharmaceutical company based in Indianapolis, Indiana that relies on intellectual property protection as the cornerstone of its business model. Patent protection, quite simply, allows Lilly to bring innovative medicines to market.1 The market exclusivity that accompanies a patent provides critical economic incentives to invest in new medicines.

3. This case concerns the Canadian patents for two such innovative medicines, Strattera and Zyprexa.2 Strattera treats attention-deficit hyperactivity disorder (“ADHD”), and Zyprexa treats schizophrenia and related psychotic disorders.3 Both medicines have been approved by Health Canada as safe and effective, and they are used by hundreds of thousands of patients in Canada.4 In the case of Strattera, the patent application was filed on 4 January 1996.5 Health Canada approved the product for use in Canada in 2004,6 and the patent expiry date would have been 4 January 2016.7 In the case of Zyprexa, the patent application was filed on 24 April 1991.8 Health Canada approved the product for use in Canada in 1996, and the patent expiry date would have been 24 April 2011.9 Canada’s application of the “promise utility doctrine” to these patents in September 2010 and November 2011, respectively, revoked these patents ab initio.10

4. The Canadian judiciary revoked the Strattera and Zyprexa patents through a unique promise utility doctrine that Lilly submits is inconsistent with Canada’s treaty obligations to protect patent rights and has resulted in the unlawful expropriation of Lilly’s investments and a breach of fair and equitable treatment under Chapter 11 of NAFTA.11 Once Lilly lost patent protection through the judiciary’s application of the promise utility doctrine to its investments, Lilly was deprived of its ability to prevent competitors from entering the market and selling copies of the very same medicines that had been deemed to lack utility by the courts, and of its ability to enforce its patent rights against infringers.